Soybeans:

May soybeans advanced 26.50 cents on volume of 156,494 contracts. Volume was the highest since March 13 when 222,838 contracts were traded and May soybeans advanced 9.25 cents and open interest increased by 8,315 contracts. On March 18, total open interest declined by 3,206 contracts, which relative to volume is approximately 20% below average. The May contract lost 4,829 of open interest, which makes the total open interest decline more impressive (bearish). It certainly is a disappointment to the bulls to see open interest decline on an advance of the magnitude seen on March 18. As this report is being compiled on March 19, May soybeans are trading 8.00 cents higher and have made a high at 14.42, but trading 16 cents off the high. Yesterday, we recommended the liquidation of short calls, and at this juncture clients should be on the sidelines. Soybeans remain on a short and intermediate term buy signal.

Soybean meal:

May soybean meal is advanced $9.20 on total volume of 64,297 contracts. Total open interest declined by 453 contracts, which relative to volume is approximately 65% below average. The March contract lost 1,230 of open interest. In yesterday’s report, we recommended that clients liquidate the short call position and move to the sidelines. As this report is being compiled on March 19, May soybean meal is trading $2.70 higher and has made a new high for the move at $463.40, which is several dollars shy of the February 27 print of $471.50. Soybean meal remains on a short and intermediate term buy signal.

Corn:

May corn advanced 7.25 cents on light volume of 160,692 contracts. Volume increased slightly from the 146,041 contracts traded on March 17 when May corn lost 7.00 cents and total open interest increased by 5,130 contracts. On March 18, total open interest increased by 5,624 contracts, which relative to volume is approximately 40% above average meaning that new buyers were aggressive about entering the corn market and driving prices higher. As this report is being compiled on March 19, May corn is trading 4.25 cents higher on the day. From March 5 through March 19, May corn has been trading in a sideways pattern and hasn’t been able to break out of it, despite the sharply higher move in wheat. Corn remains on a short and intermediate term buy signal. We have no recommendation.

Chicago wheat:

May Chicago wheat advanced 18.00 cents on surprisingly light volume of 81,914 contracts. Volume was only slightly above the 76,249 contracts traded on March 17 when May wheat lost 12.75 cents and total open interest increased by 1,154 contracts. On March 18, total open interest declined by 201 contracts, which is minuscule, but a decline of open interest on an advance of the magnitude seen on March 18 is bearish. Since March 12, open interest action has been bearish relative to price advances and declines. Normally, this would be a cautionary sign, but we know that managed money has been extremely bearish on Chicago wheat and undoubtedly are still covering short positions. As this report is being compiled on March 19, May Chicago wheat is trading 24.75 cents higher and is made a new high for the move at $7.18 1/2. This is the highest price since October 24 when the May contract printed $7.20. Maintain bullish positions recommended in the February 6 report.  Sell stops should be placed at $6.69 3/4. 

Kansas City wheat:

May Kansas City wheat advanced 19.75 cents on volume of 21,193 contracts. Total open interest increased by a massive 1,910 contracts, which relative to volume is approximately 250% above average. The May contract accounted for loss of 193 contracts, which makes the total open interest increase more impressive (bullish). The behavior of open interest in KC wheat has been outstanding compared to Chicago wheat, and one reason is the fundamentals for KC wheat are better than Chicago’s, but also the Chicago contract is the most heavily traded. As this report is being compiled on March 19, May KC wheat is trading 26.50 cents higher and has made a new high for the move at $7.91 3/4, which is the highest print since June 5, 2013 ($7.99 1/4). Maintain bullish positions recommended in the February 6 report.

Live cattle:

April live cattle advanced 67.5 points on light volume of 39,311 contracts. Surprisingly, volume was only slightly above the 37,679 contracts traded on March 17 when April cattle lost 22.5 points and total open interest increased by 789 contracts. On March 18, total open interest increased by a massive 3,300 contracts, which relative to volume is approximately 230% above average meaning those that participated in the market were massively increasing new long positions and driving prices higher. As this report is being compiled on March 19, April cattle is trading 40 points higher and has made a new high for the move at 1.46325, which is getting close to the contract high of 1.46825 made on March 5. Continue to hold bullish positions recommended in late December.

WTI crude oil:

April WTI crude oil advanced $1.26 on heavy volume of 669,463 contracts. Volume was the heaviest since March 13 when 686,106 contracts were traded and April WTI advanced 21 cents while total open interest declined by 4,722 contracts. On March 18, total open interest declined by 21,570 contracts, which relative to volume is approximately 30% above average meaning liquidation was fairly heavy on a decent sized advance. The April contract lost 33,063 of open interest. On March 12, after WTI generated a short-term sell signal, we recommended shorting out of the money calls, and since then the market has moved sideways. Wait until tomorrow to see if we get another rally, then initiate bearish positions. As we said in yesterday’s report, May WTI should not advance much beyond $100.02

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 5.9 million barrels from the previous week. At 375.9 million barrels, U.S. crude oil inventories are in the upper half of the average range for this time of year. Total motor gasoline inventories decreased by 1.5 million barrels last week, but are near the upper limit of the average range. Finished gasoline inventories increased while blending components inventories decreased last week. Distillate fuel inventories decreased by 3.1 million barrels last week and are below the lower limit of the average range for this time of year. Propane/propylene inventories grew 0.2 million barrels last week and are near the lower limit of the average range. Total commercial petroleum inventories decreased by 0.5 million barrels last week.

Natural gas:

April natural gas lost 8 cents on light volume of 164,898 contracts. Volume was the lightest since March 14 when 162,409 contracts were traded and April natural gas advanced 4.2 cents while total open interest declined by 5,871 contracts. On March 18, total open interest increased by 912 contracts, which relative to volume is approximately 70% below average. The April contract lost 11,191 of open interest. As this report is being compiled on March 19, April natural gas is trading 1.6 cents higher on low volume. For the past 2 weeks, volume has been declining, and this indicates a lack of interest. Though natural gas remains on a short-term sell signal and an intermediate term buy signal, we are recommending a stand aside posture. We think that natural gas will slowly drift lower possibly to the $4.16-4.28 level, where it will likely find support.

Euro:

The June euro advanced 9 pips on light volume of 158,501 contracts. Total open interest increased by 3,565 contracts, which relative to volume is approximately 10% below average. As this report is being compiled on March 19, the June euro is trading 10 pips lower on light volume. The euro remains on a short and intermediate term buy signal, but we see no reason to be involved in it.

Yen:

The June yen advanced 20 pips on light volume of 130,518 contracts. Total open interest declined by 159 contracts, which is minuscule and dramatically below average. As this report is being compiled on March 19, the June yen is trading 13 pips lower. The June yen remains on a short and intermediate term sell signal.

Gold:

April gold lost $13.90 on volume of 173,894 contracts. Total open interest declined by 7,118 contracts, which relative to volume is approximately 55% above average meaning that liquidation was fairly heavy on a modest decline. Since making its high for the move at $1392.60 on March 17, the market has pulled back and as this report is being compiled on March 19, April gold has made a low of 1335.70. This takes out the March 11 low of 1337.80, and is below the 20 day moving average of 1345.20, but above the 50 day moving average of 1294.90. Maintain bullish positions recommended in February 6 report.

Silver:

May silver lost 41.3 cents on volume of 50,390 contracts. Total open interest increased by 474 contracts, which relative to volume is approximately 50% below average. As this report is being compiled on March 19, May silver is trading 11.6 cents lower on the day and has made a new low for the move the $20.525. The Federal Reserve minutes have been released and this has negatively impacted silver and gold. Yesterday, we recommended that bullish positions that were originally recommended in February 6 report be liquidated. Clients should be on the sidelines.

S&P 500 E mini:

The S&P 500 E mini advanced 13.00 points on heavy volume of 2,926,098 contracts. Total open interest increased by 88,328 contracts, and this large increase is due to the upcoming expiration of the March contract in which participants are switching out of March into June. As this report is being compiled after the release of the Federal Reserve minutes, the June S&P 500 E mini is trading 5.50 lower on the day. Maintain the long out of the money call coupled with long puts for clients who hold long equity positions.